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Annual Report 2012Operational Review

THE BRIDGESTONE GROUPThe World’s Largest Manufacturer of Tire and Rubber ProductsSince its founding in 1931, the Group has steadily expanded its operations, centered on tire production, and today, the Group has over 180 manufacturing plants and R&D facilities around the world.

OUR BUSINESS

The Group provides tires for passenger

cars, trucks, buses, motorcycles,

construction and mining vehicles,

aircraft, etc. Its tire operations extend

across a wide range of fields, from raw

material production to sales and

maintenance, as well as retread

solutions businesses.

TIRE BUSINESS

CONTENTS

1 FINANCIAL HIGHLIGHTS

2 SEGMENT HIGHLIGHTS

4 MANAGEMENT TASKS

8 RESEARCH AND DEVELOPMENT

11 CORPORATE GOVERNANCE, COMPLIANCE, AND RISK MANAGEMENT

14 BOARD OF DIRECTORS AND CORPORATE AUDITORS

15 SHAREHOLDER INFORMATION

FORWARD-LOOKING STATEMENTSThe descriptions of projections and plans that appear in this publication are “forward-looking statements.” They involve known and unknown risks and uncertainties in regard to such factors as product liability, currency exchange rates, raw material costs, labor-management relations, and political stability. These and other variables could cause the Group’s actual performance and results to differ from management’s projections and plans.

The Group makes and sells a range of

rubber products and other products.

In recent years, Bridgestone has drawn

on its original technologies to launch

a number of environment-friendly

products, such as adhesive film for

solar modules.

DIVERSIFIED PRODUCTS BUSINESS

1Annual Report 2012 Operational Review

FINANCIAL HIGHLIGHTSBridgestone Corporation and Subsidiaries Years ended December 31, 2012, 2011, and 2010

2012 2011 2010 2012/2011 2012

Millions of yen Percent change Thousands of U.S. dollars1

Net Sales ¥3,039,738 ¥3,024,356 ¥2,861,615 0.5% $35,109,009

Overseas Sales 2,343,546 2,330,154 2,189,765 0.6 27,067,983

Operating Income 285,995 191,322 166,450 49.5 3,303,246

Net Income 171,606 102,970 98,914 66.7 1,982,051

Total Equity 1,419,094 1,165,673 1,176,147 21.7 16,390,552

Total Assets 3,039,251 2,677,344 2,706,640 13.5 35,103,384

Capital Expenditures 245,644 201,390 182,648 22.0 2,837,191

Depreciation and Amortization2 156,511 159,666 170,663 –2.0 1,807,704

Research and Development 82,801 83,982 85,154 –1.4 956,353

Net Return on Shareholders’ Equity (ROE) (%) 13.7 9.1 8.9 — —

Net Return on Total Assets (ROA) (%) 6.0 3.8 3.6 — —

Per Share Data Yen Percent change U.S. dollars1

Net Income

Basic ¥ 219.26 ¥ 131.56 ¥ 126.19 66.7% $ 2.53

Diluted 219.10 131.50 126.16 66.6 2.53

Shareholders’ Equity3 1,755.60 1,444.53 1,458.01 21.5 20.28

Cash Dividends 32.00 22.00 20.00 45.5 0.37

1 Solely for the convenience of readers, the Japanese yen amounts in this annual report are translated into U.S. dollars at the rate of ¥86.58 to $1, the approximate year-end rate.2 Amortization of Goodwill is included in Depreciation and Amortization. 3 Shareholders’ equity is equity excluding stock acquisition rights and minority interests.

Note: Net sales exclude inter-segment transactions.

Operating Income / Operating Income Margin

¥ billion / %

Net Income / ROE

¥ billion / %

Net Sales / Overseas Sales

¥ billion 70X30.5

2012

2011

2010

2009

2008

2,597.0

3,234.4

1,982.2

2,861.6

3,024.4

2,189.8

2,330.2

3,039.7 2,343.5

2,448.3

70X30.5

2012

2011

2010

2009

2007 7.4

2.9

5.8

9.4%

250.0

75.7

166.5

6.3 191.3

286.0

70X30.5

2012

2011

2010

2009

2007

1.0

171.6

131.610.3

103.09.1

98.98.9

0.1 /

13.7%

Bridgestone Corporation2

SEGMENT HIGHLIGHTSBridgestone Corporation and SubsidiariesYears ended December 31, 2012, 2011, 2010, and 2009

Tire BusinessTires: Tires and tire tubes for passenger cars, trucks, buses, construction and mining

vehicles, industrial machinery, agricultural machinery, aircraft, and motorcycles,

retreading materials and services, automotive maintenance and repair services,

tire raw materials, and other tire-related products

Diversified Products BusinessChemical and industrial products: Vehicle parts, polyurethane foam and related

products, electronic precision parts, industrial materials-related products, civil engineering

and construction materials and equipment, and other

Sporting goods: Golf balls, golf clubs, other sporting goods, and other

Bicycles: Bicycles, bicycle-related goods, and other

Other: Finance, and other

Note: Net sales exclude inter-segment transactions.

BUSINESS SEGMENTS

16%

84%

Net Sales by Business Segment

Net Sales by Business SegmentNet Sales / Operating Income Margin

¥ billion / %

Net Sales / Operating Income Margin

¥ billion / %

Capital Expenditures

¥ billion

Capital Expenditures

¥ billion

2012

2011

2010

2009

2007

2,151.3

2,377.3

2,536.7

2,554.1

2,750.4

3.5

6.4

7.3

10.2%

7.1

159.7

160.0

174.8

223.7

257.2

2012

2011

2010

2009

2007

2012

2011

2010

2009 445.7

484.3

485.6

487.6

0.1

2.8

1.2

5.3%

8.6

2012

2011

2010

2009

2007

21.7

22.9

26.8

22.5

32.8

Others

Europe

The Americas

Japan


Note: Net sales exclude inter-segment transactions.Net sales are categorized by the countries or territories of external customers. For net sales, operating profits, and operating margins by geographic segment, please refer to Supplementary Information of FY 2012, whose URL is http://www.bridgestone.com/ir/library/result/pdf/e_h24_supplementary.pdf

2012

2011

2010

2009

2007

614.8

671.9

694.2

696.2

941.5

2012

2011

2010

2009

2007

1,125.7

1,212.9

1,273.3

1,321.2

1,498.0

2012

2011

2010

2009

2007

363.0

388.0

418.8

348.2

511.7

2012

2011

2010

2009

2007

493.5

588.9

638.0

674.1

439.1

Net Sales

¥ billion

Net Sales

¥ billion

Net Sales

¥ billion

Net Sales

¥ billion

NET SALES By MARKET

22%

11%

44%

23%

Net Sales by Market

Net Sales by Market

Net Sales by Market

Net Sales by Market

4 Bridgestone Corporation

Seeking to be the “World’s undisputed No. 1 tire and

rubber company both in name and reality” as the ultimate

goal of the Group management, the Group will advance

all business activities based on an awareness of its

corporate social responsibility. To that end, the Group will

strive to realize the mission spelled out in its corporate

philosophy—“Serving Society with Superior Quality.” In

addition, the Group will solidify its business footing in

Japan and will rigorously proceed with Group and global

business development on the strong foundation of its

Japanese business.

In accordance with this fundamental approach, we

position the strategic business unit (SBU) organization

and the Mid-Term Management Plan (MTP) as the

foundation of management, and, striving to be a true

global corporation with management optimized on a

Group-wide basis, we step-up the pace of management

reforms and advance operational development.

The Companies face rapid, major structural changes

that can significantly affect earnings, including changes

in the composition of demand, new competition, and

fluctuations in currency exchange rates and the prices of

raw materials and feedstocks. Against that backdrop, the

Companies believe that it will be difficult to achieve

sustained, quality growth solely by pursing external

growth in the scale of net sales and its overseas business.

In addition, although there are signs of recovery in U.S.

business conditions, there are also concerns about a

serious economic recession in Europe and about

decelerating economic growth in emerging countries.

The degree of uncertainty and risk in the global economy

has increased beyond previous levels.

To respond quickly to this uncertainty and risk, we will

strengthen bottom-up proposal functions from the front

lines, communication intended to optimize Group and

global operations, and teamwork for the full utilization of

Group resources. In accordance with the Lean & Strategic

approach, we will create new customer value through

both technology innovation and business model

innovation. In this way, we will strive to be “Dan-Totsu” of

the industry in all aspects of businesses.

MTP2012 Target Performance

Management Target

• To achieve status as a true global corporation

• To achieve “Dan-Totsu” in all our industries

Target Performance

• ROA More than 6%, “improve further” as target

• Net sales Yearly average over 5% increase

• Operating income ratio Achieve 10% as early as possible,

“improve further” as target

• Capital expenditure Yearly average 250 billion Yen, approximately 50% for tire

strategic projects

MANAGEMENT TASKS

Five Approaches

Expanding strategic tire products and businesses

Reinforcing fundamental competencies

Making the most use of “vertical and horizontal expansion” efficiencies

“Selection and concentration” in diversified products business

Enhancing environmental activities and eco-friendly products and businesses

1

2

3

4

5


In our MTP 2012, which was announced in October

2012, we have formulated five items as initiatives to

be “Dan-Totsu.”

The first is expansion of strategic tire products and

businesses. In passenger tires, including runflat tires, UHP

tires, and winter tires, we will incorporate the Group’s

leading-edge technologies and take steps to aggressively

expand sales on a Group-wide basis. In the truck and bus

tire segment, in order to meet the needs of customers

and society for environment-responsive, cost

optimization, and safe operation, we will implement

global development of our solutions business utilizing

retread technologies, targeting especially strong growth

in emerging markets. In off-the-road radial tire market for

construction and mining vehicles, we will promote new

plant project in North America and will build a new plant

in Thailand as second overseas production site of off-the-

road radial tire. In this way, we will strengthen our system

in order to respond rapidly and with flexibility to changes

in the operating environment.

The second initiative is focused on reinforcing

fundamental competencies, specifically by leveraging

optimized specifications and reviewing cost for

processing while enhancing safety and quality in order

to bolster overall supply chain competitiveness. In

optimizing specifications, the fundamental task is to meet

the quality requirements demanded by the market. On

that basis, we will focus on technical developments that

also contribute to the environment, with a focus on

achieving enhanced safety and reducing raw material

consumption (half weight). We will strive to maximize

those effects through integrated activities that combine

product development, production technologies, and

procurement/internal manufacturing. In reviewing cost

for processing while enhancing safety and quality, we will

develop high-productivity technologies while maximizing

the use of existing production capacity. This will allow us

to establish an organizational system that contributes to

improved global profitability.

The third initiative is to make full use of vertical

and horizontal expansion efficiencies. Through vertical

Creation of New Customer Value through Technology and Business Model Innovation

The Bridgestone Group will work to reinforce the strengths of its “vertical and horizontal expansion.”

In this way, we will strive to achieve “technology innovation” in raw materials, products, and services, and to realize

“business model innovation” in the conduct of solution-based businesses from the customer’s perspective.

Technology innovation

Raw materials • Guayule

• Russian dandelion

• Biomass synthetic rubber

Products • Strategic products

• 100% sustainable material concept

• Air Free Concept

Services • Contact Area Information Sensing technology (CAIS)

• Tire Printing Technology

Business model innovation

Fleet solution • Solutions package proposals combining new tires, retread tires, and maintenance services

Mining solution • New customer value created by combining Bridgestone products and services


expansion in the upstream sectors of the supply chain,

we will control tire quality and cost beginning at the raw

material level. In the downstream, we will expand the

network of retail outlets to provide customers with

optimal products and services on a timely basis. In addition,

we will advance initiatives that fully leverage our ability

to rapidly respond to market needs. Moreover, through

“horizontal expansion,” we will evaluate the roles of

industrially developed countries and emerging countries

in sales and production, and invest management resources

to maximize their contribution to the Companies as a whole.

The fourth initiative is business planning based on the

principles of selection and concentration in diversified

products business. Through further strengthening our

global business, working to develop new business models

and leveraging technological strengths in such areas as

rubber, adhesives, and reinforcement materials, we will

work to expand profits, mainly from Anti-Vibration Rubber,

belts, hoses, rubber crawlers, and seismic isolation rubber

businesses in chemical and industrial products operations.

In addition, in BSAM’s diversified products business, we

will reinforce the building products operations, centered

on roofing products.

The fifth initiative involves environmental activities

and eco-friendly products and businesses. In accordance

with the recently reissued and reinforced global

Environmental Mission Statement, we have determined

the long-term direction of the Companies’ environmental

activities. Moving forward, we will target the realization

of three societies—an ecological conservation society,

a resource conservation society, and a reduced CO2

emissions society. We have already established certain

numerical objectives to support these three societies,

such as targets for CO2 emission reductions, taking into

consideration such factors as the social and operating

environments. By incorporating these into plans for

individual eco-friendly products and operations, we have

a framework for the achievement of these goals.

The Group believes that in order to realize a basic system

for implementing those strategies and measures, it must

optimize organizational systems on a Group and global

basis and undertake a Mid-Term Management Plan that is

MANAGEMENT TASKS

Bridgestone’s resources for vertical integration: upstream rubber operations in Indonesia (left) and downstream Cockpit, a retail outlet in Thailand


consistent for the Group as a whole. Therefore, the Group

will continue to strengthen those aspects of its operations.

As an organizational systems initiative, the Group will

gain an accurate understanding of market and customer

needs in regions worldwide. Based on that understanding,

the Group will evolve and further increase the effectiveness

of the SBU system, which was introduced to reflect such

needs optimally and rapidly on a Group and global basis.

Further, in order to prevail and survive amid tough

business conditions, it is critical for the Group to exploit

its wide-ranging and diverse management resources to

the utmost and in accordance with consistent targets and

plans. To realize those objectives, the Group will revise

the Mid-Term Management Plan on an annual rolling basis,

extending it by one year at a time. Those revisions will

enable the Group to respond accurately and rapidly

to dramatically fluctuating business conditions as it seeks

to maintain earnings levels. In other words, the Group will

move forward vigorously to build a corporate organization

that steadily increases profitability.

In addition, the Group will step up efforts to build

systems that will enable the realization of its responsibilities

as a company toward all of its stakeholders. The Group

will conduct regular yearly reviews of its policy for the

development of internal control systems that ensure

appropriate operations. Moreover, the Group will

undertake reviews of that policy as needed and steadily

develop systems in accordance with the policy. For

corporate governance systems, the Group will take

further steps to ensure that the Company’s decision

making consistently follows fair and transparent rules.

Centering on the Integrated CSR Enhancement

Committee, the Group’s corporate social responsibility

activities will establish systems and heighten the

effectiveness of activities in all areas, including rigorous

risk management for environmental protection, product

safety, compliance and disaster prevention and safety

initiatives; internal control improvement; employee

education; and corporate citizenship activities.

Bridgestone’s Long-term Environmental Vision

In April 2012, the Bridgestone Group set a long-term environmental vision for the year 2050 and beyond with respect to the three objectives of our Environmental Mission Statement - namely, ecological conservation, resource conservation and reduction of CO2 emissions - in order to help establish a more sustainable society.

2020 2050 and beyond

In harmonywith nature

Value naturalresources

Reduce CO2

emissions

CO2

reduction

In balancewith nature

100%Sustainablematerials

Globally-agreedtarget

Ecologicalconservation and

restoration

Resourceproductivity

sustainablesociety

Bridgestone Group’sEnvironmental Mission

Back casting

Long-term visionMid-term target


The Group’s mission of “Serving Society with Superior

Quality” mandates an unending quest to create higher

value-added products worldwide to fulfill increasingly

diverse societal requirements and market needs. To

respond appropriately to rapidly changing market trends,

such as changes in demand and competitive structure,

the Group conducts R&D activities with the objective of

establishing a competitive business model on a global

basis, taking into consideration the environmental impact

of its product development and production processes.

A key challenge of the Group is to be “Dan-Totsu” of

technology in each business domain in accordance with

the Mid-Term Management Plan.

The Group conducts technical development in a wide

range of fields, from the development of raw materials,

products, and services to future-focused fundamental and

production technologies. Technologies that optimize

quality and minimize cost of the product from the raw

materials level can facilitate reductions in raw material

consumption and contribute to environmental

conservation and can help offset higher prices for raw

materials. Activities also focus on contributing to the

development of business solutions that provide products

and services with added value.

Tires

R&D programs in the tire segment are based on the

development philosophy of “peace-of-mind” for

everything. The Group seeks to create tires with higher

added value through the pursuit of three core elements

of technology and product development of tires:

environment, safety, and comfort. Based on the above-

mentioned philosophy, the Group strives to further

reinforce this area as core eco-friendly product group and

businesses and strategic product group and business.

With regard to minimizing environmental impact, the

Group will endeavor to develop eco-friendly tires that

fulfill three environmental goals of the Group’s

Environmental Mission Statement: in harmony with

nature, value natural resources, and reducing CO2

emissions. In 2012, the Group established a long-term

environmental vision targeting 2050 and beyond in these

three activity areas. These initiatives are designed to

promote safety and comfortable mobility in the future

and to help realize a sustainable society.

Regarding the activity of “In harmony with nature,”

the Group is developing a new method of inhibiting

disease in rubber trees in order to advance the productivity

of natural rubber. The introduction of a scientific diagnostic

methodology enables easier and speedier visual diagnosis

of disease.

Regarding the activity of “Value natural resources,”

the Group has set the goal of continuously using “100%

sustainable materials” in our products as the long-term

vision for 2050 and beyond as tire technology for the

future. We will take the following actions as we work

towards this goal; (1) reduce raw material consumption,

(2) recycle resources and use them efficiently, and

(3) expand and diversify renewable resources. Specifically,

regarding (3) expand and diversify renewable resources,

the Group is accelerating R&D activity for renewable

natural rubber by developing Guayule and Russian

dandelion. At the 2012 Paris Motor Show the Group

exhibited a concept tire of “100% sustainable materials.”

Guayule Russian dandelion

RESEARCH AND DEVELOPMENT


Further, the Group is targeting the year 2020 for

commercial sale of certain sustainable materials used in

the manufacturing process.

Regarding the activity of “Reducing CO2 emissions,”

the Group believes that the development of tires with

reduced rolling resistance designs, which enhance fuel

efficiency, can make a major contribution to the

reduction of CO2 emissions.

The Group’s ECOPIA line of eco-friendly tires features

reduced rolling resistance without impairing safety, which

is achieved in part through the use of NanoPro-Tech

(Nanostructure-Oriented Properties Control Technology),

a Group-patented technology.

The Group has begun to supply ECOPIA tires as original

equipment passenger tires for the TOYOTA PRIUS PHV,

Mitsubishi Mirage, Nissan Serena S hybrid, and other cars.

In the replacement market in Japan, the Group has

launched The ECOPIA EP001S, which has obtained the

highest rank—AAA—for rolling resistance performance

and the highest rank “a” for wet grip performance under

the Japan Automobile Tire Manufacturers Association,

Inc.’s “Labeling System.” Moreover, the Group has

launched “ECOPIA EV – 01” for electric cars, which is

developed based on the noise sensory assessment in

collaboration with an outside research institute and noise

restraining technology cultivating by “REGNO.” In the

future, the Group will continue to take aggressive steps to

further enhance the ECOPIA lineup, including global

development and expanding original equipment offerings

on new cars.

The Group has positioned runflat tires as an important

strategic product line. The Group is actively working to

promote the use of runflat tires, which continue to

function at a specified speed for a specified distance after

the loss of air pressure. In addition, since the runflat tires

eliminate the need for a spare tire (emergency use tire),

they help to conserve resources and support improved

fuel efficiency through reduced vehicle weight.

The Group’s strategic products also include off-the-

road radial tires for construction and mining vehicles. The

use of advanced technologies in these products has

earned an excellent reputation of the Group in the

marketplace. The Groups new off-the-road plant in Aiken

County, South Carolina, USA will begin production in

2014, followed in 2015 by the new construction and

mining radial tire plant in Rayong, Thailand. The Group is

expanding its production and supply capacities by

developing the production technologies overseas.

Moreover, the Group launched a new system of

monitoring tire pressure and thermal management

“B-TAG” which is sending information measured by

a uniquely developed sensor to drivers in real. The Group

will deploy this new solution business globally in the future.

The solutions business using retread tires contributes

to improve total life and fuel efficiency by integrating

new tires, retread tires and maintenance. The Group is

developing Bandag Retread Factory outlets that offer

integrated manufacturing, service, and sales of retread

tires at more locations globally. In addition, the Group is

also developing the Eco Value Pack, which contributes to

environmental conservation, cost optimization and safe

operation domestically. As for new technologies for the

future, the Group successfully developed the TRISAVER,

a new truck and bus tire manufacturing technology,

Concept tire of “100% sustainable materials”

TRISAVER


which results in both significant resource conservation

and enhanced fuel efficiency by using the retread

technology. While new tires are manufactured by

vulcanizing all the materials at once, the TRISAVER

technology employs separate vulcanizing of the casing

(the original body of the tire) and the tread (the rubber

component of the tire that makes contact with the road).

This new technology greatly reduces rolling resistance

compared to conventional tires, and at the same time

enhances durability, thereby potentially increasing the

number of times the tire can be retreaded.

Diversified products business

In the diversified products business, the Group continues

working to strengthen its product lineups in key

operational fields. At the same time, the Group is tackling

R&D activities with the objective of providing products

that accurately meet constantly changing needs and

foster customer satisfaction.

The quality of the Group’s adhesive film for solar

modules, which is one of its key products in the high-

performance film field, is highly regarded in the

marketplace. That quality was made possible by the

Group’s original material composition technologies and

superior precision processing technologies. Solar modules

provide an environmentally friendly system for generating

green power and demand for them is expected to grow in

the medium and long term. By working to achieve further

increases in the performance of the Group’s products and

taking aggressive steps to boost our production capacity,

the Group is making a contribution to the spread of

green energy.

Regarding rubber for the seismic isolation of buildings,

which prevents building collapse and damage by

earthquakes, the Group continues to develop high-

performance products while considering the

environment. The Group has begun to sell new products

designed to reduce impact on the environment both

during production and after use, through the use of

materials developed to replace lead, which provided an

attenuation characteristic.

The Group successfully developed Anti-Vibration

Rubber with significantly reduced weight in comparison

with conventional products by mixing with plastic torque

rod and resinifying clasp. This product was appreciated

due to the contribution to improvement of fuel

consumption efficiency by resources-saved product and

car weight saving. Consequently, the product was

awarded the Chairman’s Prize from the Chairman of Japan

Management Environmental Association for industry,

2012 Resource Recycle Technology System Honor.

RESEARCH AND DEVELOPMENT

Anti-Vibration RubberRubber for the seismic isolation of buildings (High-damping rubber bearing)

Bolt hole

Cover rubber

Flange

High-damping rubber

Steel shim


Continually enhancing corporate governance is one of

management’s most important focus points. This will

ensure that the Bridgestone Group continues to fulfill its

founding mission as stated in its corporate philosophy:

“Serving Society with Superior Quality.”

Based on this approach, in accordance with the

responsibility and authority delineated in the Administrative

Authority Rules, as well as in the Policy Management Rules,

Bridgestone Corporation is committed to developing,

communicating, and abiding by fair, transparent decision-

making and management policies.

Overview of corporate governance system

Bridgestone has adopted a corporate officer system to more

clearly distinguish between management and operational

responsibilities. This system allows the Board of Directors

to focus more effectively on overseeing the execution of

business operations. There were nine directors, including

four outside directors, as of December 31, 2012. At the

General Meeting of Shareholders held on March 26, 2013,

all of the directors reached the end of their tenure, and eight

directors, including four outside directors, were elected.

Bridgestone has adopted a corporate auditor

governance model as specified in the Companies Act. The

corporate auditors audit the execution of duties by the

directors, while the Board of Directors oversees the

execution of duties by the directors. As of December 31,

2012, the Board of Corporate Auditors has four members,

including three outside corporate auditors, one of whom is

a full-time outside corporate auditor.

In addition, to further raise the transparency and

impartiality of corporate governance, on January 31,

2013, the Nominating Committee, Compensation

Committee, and Governance Committee were established

as advisory bodies to the Board of Directors. Following

deliberations, these committees provide advice to the

Board of Directors in regard to such matters as personnel

issues that involve directors, the compensation of directors

(when the total amount of auditor compensation is

revised, then that amount), and the governance system

and related issues. These committees are composed of

four outside directors, and one or more corporate auditors

participate as observers.

In regard to personnel and compensation matters that

involve corporate officers who are not concurrently

serving as directors, the Officer Nomination and

Compensation Committee serves as an advisory body to

the CEO and Representative Board Member (CEO) and the

COO and Representative Board Member (COO), who

are the leaders of the operating divisions. Following

deliberations, this committee provides advice to CEO and

COO, and then further deliberations are held at meetings

of the Board of Directors, which makes decisions. The

Officer Nomination and Compensation Committee is

composed of five or more members who are selected from

among directors, corporate officers, or divisional heads

who have been nominated in advance by the Board of

Directors. In addition, one or more corporate auditors

participate as observers.

Bridgestone has a management system in which CEO

and COO are the leaders of the operating divisions. CEO is

principally in charge of overall management and strategy,

and COO is principally in charge of operations. At the same

time, these two officers implement a system of mutual

checks. In addition, the Chairman of the Board leads

meetings of the Board of Directors and the General

Meeting of Shareholders. The Company has taken steps to

further strengthen its corporate governance system by

separating and clarifying the respective roles and authority

of CEO, COO, and Chairman of the Board; by advancing

the sharing of information; and by increasing the

transparency of decision-making processes.

In the operating divisions, the Company has

established the Executive Operational Committee, which

deliberates and reports on specific matters set forth in

Company policy as well as other important matters. In

addition to key corporate officers, such as CEO and COO,

the full-time corporate auditors are also standing members

of the Executive Operational Committee. In this way, the

committee ensures that information about the status of

management execution is shared and that the supervisory

function is fulfilled. As described above, the Officer

Nomination and Compensation Committee has been

established as an advisory body to CEO and COO. The

committee provides advice on personnel and

compensation matters that involve corporate officers who

are not concurrently serving as board members.

In addition to compliance with laws, regulations, and

the articles of incorporation, the Company has formulated

a structure to promote compliance and basic policies,

CORPORATE GOVERNANCE, COMPLIANCE, AND RISK MANAGEMENT


which call for members of the Board, corporate officers,

and all Bridgestone employees to conduct themselves in

line with the corporate philosophy, so that the Bridgestone

Group can maintain the trust of its stakeholders. A unit

dedicated to handling compliance, which is overseen by

the Chief Compliance Officer (CCO), has responsibility for

the operation of a compliance helpline which provides

compliance-related advice to employees, as well as for

promoting compliance-related education for directors and

employees. Recognizing the importance of compliance

activities as an element of corporate social responsibility

(CSR), Bridgestone has established the Compliance

Committee, which is chaired by CCO and is a subcommittee

of the Integrated CSR Enhancement Committee, which is

chaired by CEO. Moving forward, Bridgestone will continue

to advance compliance activities as one facet of its CSR.

Risk management activities, led by the Chief Risk

Officer (CRO), focus on the identification and mitigation of

operational risks and the implementation of measures—as

outlined in a basic risk management manual—designed to

prevent both small-scale accidents and large-scale

incidents. CRO is also responsible for contingency planning

activities which include the formulation and review of

business resumption plans aimed at restoring operations as

quickly as possible in the event of any disruption. In line

with the recognition of the importance of risk

management in CSR, Bridgestone has previously

established the Risk Management Committee, which is

chaired by CRO and is a subcommittee of the Integrated

CSR Enhancement Committee. Moving forward,

Bridgestone will continue to find additional ways to

strengthen the system to comprehensively manage risks

that could have a major influence on the operating

activities of Bridgestone and other Group companies.

Bridgestone has formulated internal policy guidelines

regarding the protection of personal data. In addition to

developing and implementing a management system

based on this policy, all employees of the parent company,

Bridgestone Corporation, undergo privacy training and are

provided access to related awareness programs to address

this important issue.

On May 1, 2006, the Board of Directors instituted an

official company policy governing internal control systems;

the Company reevaluates its activities in this area each

year, working to ensure appropriate internal control.

In regard to the Japanese Financial Instruments and

Exchange Act, and in particular to the section regarding

the evaluation of internal control systems to assure the

reliability of financial reporting and related information,

Bridgestone will work to ensure an effective and reliable

system of internal controls on a Group-wide basis and to

further raise the level of internal control throughout

the Group.

Bridgestone has no connection whatsoever with

antisocial forces or groups that threaten public order and

safety, and takes a resolute stand against such activities.

A department has been established to evaluate information

received regarding such matters and take necessary action

to ensure compliance with this policy, and the Company

has worked to build relationships of trust and cooperation

with external institutions, such as the police and other

related organizations. Bridgestone is working to create

a manual for dealing with inappropriate or illegal requests,

evaluating contracts and the parties thereto to ensure

their appropriateness and that they have no relationship

with any organizations or groups that are illegal or

threaten public order or safety, and are implementing

other related measures. Bridgestone will strive to see that

these measures are widely known and will continue to

strengthen internal systems aimed at identifying any such

groups, programs, or initiatives with which the Company

may come in contact.

Status of audits by the corporate auditors, the

internal auditors, and the independent auditors

The corporate auditors conduct their audits based on

policies determined by the Board of Corporate Auditors.

Directorial conduct oversight involves a number of

auditing activities, including attending meetings of

the Board of Directors and other important meetings,

interviews with directors to ascertain the status of

operations, reviews of important business documents and

on-site audits of business offices. Moreover, the corporate

auditors meet with the representative directors to

exchange information and opinions and hold meetings

with the corporate auditors of major Bridgestone

subsidiaries in Japan. Bridgestone has established

Corporate Auditor Office with dedicated staff as the

organization to support the Board of Corporate Auditor.

CORPORATE GOVERNANCE, COMPLIANCE, AND RISK MANAGEMENT


As of March 26, 2013

The Internal Auditing Office and internal auditing

departments within the Company’s divisions and major

subsidiaries conduct internal accounting and operational

audits. The Internal Auditing Office makes annual audit

plans and conducts on-site audits of each function,

division, and subsidiary. It employed 31 people (excluding

those working concurrently in other positions) as of

December 31, 2012. The Internal Auditing Office and the

Company’s internal auditing departments have conducted

audits at Group companies that have instituted organizational

changes in line with the provisions of the Act, with the aim

of ensuring a more robust internal control system.

Deloitte Touche Tohmatsu LLC performs the

accounting audit of the Company’s financial statements.

The accounting audit team in fiscal 2012 included four

certified public accountants, eight assistants who were

certified public accountants, four associate members of

the Japan Institute of Certified Public Accountants, and

eight other staff members.

The corporate auditors, the Internal Auditing Office, and

the accounting auditors exchange information and opinions

as necessary and generally maintain close contact, thereby

working to increase audit efficiency and effectiveness.

Outside directors and outside corporate auditors

As of March 26, 2013, the Company has four outside

directors and three outside corporate auditors.

The Company believes that the outside directors

contribute to the strengthening of corporate governance,

including appropriate decision-making at meetings of

the Board of Directors. To that end, the outside directors

provide independent opinions that reflect their sound

judgment and extensive experience, which are based on

their varying backgrounds and fields of specialization. In

addition, the Company believes that the outside corporate

auditors can enhance the effectiveness of the corporate

auditors in audits of directors’ business execution. To that

end, the outside corporate auditors attend important

meetings, such as meetings of the Board of Directors and

meetings of the Board of Corporate Auditors, and provide

opinions from an objective, neutral viewpoint, based

on their varying perspectives as specialists and on their

extensive experience.

Through measures and deliberations at meetings

of the Board of Directors, such as those regarding the

reevaluation of policies related to financial reporting and

the establishment of internal control systems, the outside

directors directly and indirectly receive reports from

internal control departments and implement effective

oversight of the directors. Through measures and

deliberations at meetings of the Board of Directors, such

as the reporting of financial results or the reevaluation of

policies to enhance internal control systems, and through

exchanges of information and opinions at meetings of

the Board of Corporate Auditors, the outside corporate

auditors work closely with the corporate auditors, the

Internal Auditing Office and the independent auditors and

strive to enhance the efficiency and effectiveness of audits.

Board of Corporate Auditors Corporate Auditors (4)

(includes 3 outside corporate auditors)

AuditInquiry

Report

General Meeting of Shareholders

IndependentAuditors

Executive Operational Committee

Officer Nomination and Compensation Committee

Integrated CSR Enhancement Committee

Compliance CommitteeRisk Management Committee

Social Activities CommitteeGroup Environmental CommitteeGroup Safety Committee

Corporate Officers (includes those serving concurrently as Board members)

Business and Management Sections

Corporate Officer responsible for Internal Auditing

Internal Auditing Office

Corporate Auditor Office

Accountingaudit

Internal audit

Management oversight

Operational execution

Board of Directors (8) (includes 4 outside directors)

Chairman of the Board

Advisory Committee to the Board of Directors

Nominating CommitteeCompensation Committee

Governance Committee

CEO and Representative Board Member COO and Representative Board Member

Yoshiyuki Morimoto

Takao Enkawa1

Masaaki TsuyaCEO and Representative

Board Member

Concurrently Chairman

of the Board

Narumi Zaitsu

Kimiko Murofushi1

Sakie Tachibana Fukushima1

Scott Trevor Davis1

Kazuhisa NishigaiCOO and Representative Board Member


BOARD OF DIRECTORS AND CORPORATE AUDITORS As of March 26, 2013

Mikio Masunaga (Full-Time)

Katsuji Hayashi2 (Full-Time)

Kenichi Masuda2

Tomoko Watanabe2

2 Outside Corporate Auditor as set forth in Article 2–16 of the Companies Act of Japan

For information regarding corporate officers, please refer to the Bridgestone Data 2013.

http://www.bridgestone.co.jp/corporate/library/data_book/pdf/BSDATA2013.pdf

For information regarding major subsidiaries, please refer to the Business Report for the 94th Fiscal Period.

http://www.bridgestone.com/ir/library/business_reports/pdf/business_report_for_the_94th_fp.pdf

BOARD OF DIRECTORS

BOARD OF CORPORATE AUDITORS

1 Outside Director as set forth in Article 2–15 of the Companies Act of Japan


Common Stock Price IndexNikkei Stock Average

06050403020100999897969594939291908912/88

100

200

07 11 12100908

Head office

10-1, Kyobashi 1-chome, Chuo-ku,

Tokyo 104-8340, Japan

Phone: +81-3-3563-6811 Fax: +81-3-3567-4615

www.bridgestone.co.jp

Established

1931

Employees

143,448

Independent auditors

Deloitte Touche Tohmatsu LLC

Technical centers

Bridgestone Corporation: Tokyo and Yokohama, Japan

Bridgestone Americas: Akron, Ohio, United States

Bridgestone Europe: Rome, Italy

Consolidated subsidiaries

316 companies

Paid-in capital

¥126,354 million

Shares

Authorized: 1,450,000,000

Issued: 813,102,321

Transfer agent

Sumitomo Mitsui Trust Bank, Limited

4-1, Marunouchi 1-chome, Chiyoda-ku,

Tokyo 100-8233, Japan

Common stock traded

Tokyo, Nagoya, Osaka, Fukuoka

Common stock price index(Relative to Nikkei Stock Average)

Common stock price range(Tokyo Stock Exchange)

Note: Relative value is based on 100 at the end of December 1988.

SHAREHOLDER INFORMATION As of January 1, 2013

2006 2007 2008 2009 2010 2011 2012

Yen

High 2,945 2,715 2,170 1,813 1,700 2,002 2,245

Low 1,903 1,941 1,215 1,094 1,396 1,506 1,602

Bridgestone Corporation

10-1, Kyobashi 1-chome, Chuo-ku, Tokyo 104-8340, Japan

www.bridgestone.co.jp

April 2013

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